Political risk insurance

Political risk insurance is a type of insurance that can be taken out by businesses, of any size, against political risk—the risk that revolution or other political conditions will result in a loss.

Political risk insurance is available for several different types of political risk, including (among others):
* Political violence, such as revolution, insurrection, civil unrest, terrorism or war;
* Governmental expropriation or confiscation of assets;
* Governmental frustration or repudiation of contracts;
* Wrongful calling of letters of credit or similar on-demand guarantees; and
* Inconvertibility of foreign currency or the inability to repatriate funds.As with any insurance, the precise scope of coverage is governed by the terms of the insurance policy.

The underwriting of political risk insurance is a dynamic, growing business. As globalisation increases, there are more corporations doing more business in more places around the world with each passing year. Some of the changes occurring in the business are high growth, new product offerings, and a greater role for private capital. [cite news | url=http://www.dnaindia.com/report.asp?NewsID=1027950 | title=For political risk, insurance isn’t all | date=May 5 2006 | accessdate=2006-07-17 | work=Rustomjee | publisher=Diligent Media Corporation | last=Mishra | first=K.C.] [cite news | last = Kambayashi | first = Satoshi | title = Of coups and coverage: Political turmoil is costly. Unless you are fully insured. | work = The Economist | date = April 042007 | url = http://www.economist.com/finance/displaystory.cfm?story_id=8967224 | accessdate = 2007-04-08 ]

While political risk insurance policies are sometimes manuscripted for specific situations, the major political risk insurers have standard forms for the coverages that they issue.


External links

* [http://www.miga.org Multilateral Investment Guarantee Agency]
* [http://www.pri-center.com World Bank's Political Risk Insurance Center]
*cite news | url=http://www.irmi.com/expert/Articles/2002/Wagner07.aspx | title=Political Risk Insurance in Asia: Who Purchases It, Where, and Why | date=July 2002 | accessdate=2006-07-17 | publisher=International Risk Management Institute | author=Daniel Wagner
* [http://www.opic.gov Overseas Private Investment Corporation]

Wikimedia Foundation. 2010.

Look at other dictionaries:

  • political risk insurance — USA One of several risk mitigation tools available to investors involved in cross border transactions, this insurance typically insures lenders and equity investors from and against losses incurred by the investors as a result of a political risk …   Law dictionary

  • political risk insurance — The risk associated with possible negative events such as expropriation of assets, changes in tax policy, restrictions on the exchange of foreign currency, or other changes in the business climate of a country. Bloomberg Financial Dictionary …   Financial and business terms

  • Political risk — is a type of risk faced by investors, corporations, and governments. It is a risk that can be understood and managed with proper aforethought and investment.Broadly, political risk refers to the complications businesses and governments may face… …   Wikipedia

  • War Risk Insurance — A policy that provides financial protection against losses sustained from occurrences such as invasion, insurrection, revolution, military coup and terrorism. Auto, homeowners, renters, commercial property and life insurance policies often have… …   Investment dictionary

  • Insurance — This article is about risk management. For Insurance (blackjack), see Blackjack. For Insurance run (baseball), see Insurance run. In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a… …   Wikipedia

  • Risk — takers redirects here. For the Canadian television program, see Risk Takers. For other uses, see Risk (disambiguation). Risk is the potential that a chosen action or activity (including the choice of inaction) will lead to a loss (an undesirable… …   Wikipedia

  • insurance — /in shoor euhns, sherr /, n. 1. the act, system, or business of insuring property, life, one s person, etc., against loss or harm arising in specified contingencies, as fire, accident, death, disablement, or the like, in consideration of a… …   Universalium

  • Risk — Typically defined as the standard deviation of the return on total investment. Degree of uncertainty of return on an asset. The New York Times Financial Glossary * * * ▪ I. risk risk 1 [rɪsk] noun 1. [countable, uncountable] the possibility that… …   Financial and business terms

  • risk — (1) Noun The possibility of loss. (2) Noun The uncertainty of whether events, expected or otherwise, will have an adverse impact. In this context, the adverse impact is usually a quantity of return ( income) or value at risk. (3) Noun the… …   Financial and business terms

  • Risk perception — is the subjective judgment that people make about the characteristics and severity of a risk. The phrase is most commonly used in reference to natural hazards and threats to the environment or health, such as nuclear power. Several theories have… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.